It's a pleasure to address you all today, on the crucial issue of the Cloud. The question I'd like to answer this afternoon is: why do we need a European Cloud strategy? And I'm going to take that question in three parts.

First, why the Cloud?

That's a very good question. Often I meet people who don't really know what it is. Fundamentally, the Cloud is a different model for providing IT infrastructure, platforms or software. Where those things are provided centrally, and distributed to end users over a network; like over the Internet network.

That relatively simple difference could revolutionise so many fields. Right at the moment, we need that revolution, we need that innovation, we need that productivity boost.

Imagine if businesses didn't have to purchase and maintain separate IT infrastructure or software themselves: but could buy as much or as little access as they need, as and when they need it. All at less cost.

That's perfect if you're a small, growing business with flexible or unpredictable demands. A perfect way to make yourself more competitive and dynamic.

Or think what it could do for the creative sector. Your media wouldn't be on bookshelves and CD racks – but on a little "shelf" somewhere in the Cloud. And you could enjoy it anytime, anywhere, on any device. Making access easier — while ensuring reward and recognition for creators.

It could revolutionise public services, making it easier to provide services that are integrated, effective, and at lower cost.

Or take science. Modern science depends on a huge amount of data: the Cloud offers a fast and flexible way to store, process and share it. Even for scientists working in different disciplines or different countries, hundreds of kilometres apart. That's why a number of prominent research centres, for example CERN and the European Space Agency, have teamed up to launch a massive Cloud computing effort, Helix Nebula.

Overall, the Cloud means a big boost to our economy. In a country like Germany, some estimate that over five years, Cloud computing could generate over €200 billion in economic benefits, and 800,000 jobs. That's around €500 per German citizen per year.

Plus there are savings to public authorities too: useful at a time of strained public finances. The UK government expects to save 20% on IT expenditure, by harmonising software with Cloud computing. 20 percent!

So: at a time when we need growth, we need jobs, and we need more efficient public services, the Cloud is something we should be getting excited about.

The second question I want to answer is, why European? Why a European strategy?

Well, the benefits of the Cloud come from its economies of scale. As do the benefits of our Single Market.

If we think small we won't get them. If we take a national approach, content ourselves with small Clouds stuck in small markets, if we lock data within old borders, then we are limiting our Cloud ambition.

In a true digital Single Market, businesses and consumers can operate across the EU. Rules in the Cloud should make it easy to do that, whether they're rules on personal data, contractual arrangements, or whatever.

Imagine you're an SME looking to expand out of your home market. Or you're an online purchaser - whether a person, a business or a government – looking to find the best deals across Europe. Or a scientific network looking to share data.

In any case: walls and limits in the Cloud will make your life harder. They mean losing critical mass in the Cloud, and having to deal with 27 sets of rules, when you should have access to a seamless digital space.

In short: to get the most Cloud benefits, we must avoid national fortresses: and think European.

The final question I want to answer tonight is: why do we need a strategy? Why do we need to take this horizontal, far-reaching look: indeed, why do we need to intervene at all?

Well – clearly our aim is not to over-regulate. That would constrain innovation and stunt growth.

On the contrary: we can boost innovation and stimulate demand.

For example, we can make the market accessible and efficient for all.

Currently the situation is pretty confusing. Service providers are normally not responsible for hosted content; those kind of limits on liability are what make a lot of e-commerce possible.

Does that also apply to the Cloud? At the moment, to be honest, it's hard to say. National case law diverges — resulting in a good deal of uncertainty. No wonder 90% of Cloud users wouldn't know who is legally liable in case of a cross-border problem.

You shouldn't need a law degree to buy Cloud services: it should be easy to know what you're getting.

Public intervention can also build trust. So that people know the Cloud is a safe and secure place to be.

Somewhere where they feel comfortable spending time and money.

We must ensure the security of our networks. We must assure people that their data is safe and protected online. And we must give them legal certainty that they can enforce their Cloud contract, if they need to.

Plus, we can ensure there is competition in the market. You shouldn't be locked in, married to one Cloud provider for life. That would mean less consumer choice, and less incentive to innovate and improve Cloud services.

It should be easy to switch Cloud providers, if you find a more suitable offer. And for that, you need to be able to take your data with you: data portability.

That's why we need a European Cloud strategy. So what will it do?

First, remember all those great benefits there could be for the public sector and public services.

In fact the public sector is already the largest buyer of IT services in Europe: about twenty percent of the market. If we harnessed that buying power, we would give a big boost to Cloud providers and ensure a rapidly maturing market for the benefit of all.

And we could build confidence and coherence in a growing market. Common requirements could really secure that leverage.

That's the purpose of our European Cloud Partnership, which can already start to address issues like standards, security, and lock-in.

Second, we need to take account of many policy areas, all the ones I've mentioned, from data protection to good contractual practice. We should take all those – and look at them through the lens of the Cloud, to ensure a coherent policy area supporting Cloud computing.

Third, we shouldn't ignore the global issues in Cloud Computing. To succeed, we will have to exchange ideas with our major trading partners.

And last, we will need a host of other measures to support and stimulate Cloud take-up: from training and awareness, to research and standardisation.

2012 is the year when the Cloud grows up. Let's be ready.

A true online market will give us the economic boost we need right now.

The Cloud shouldn’t be something that happens to Europe – it should happen with Europe.

We have a chance to put ourselves in a more competitive position, and, yes, even well ahead of the global pack. So let's not just be Cloud-friendly: but Cloud-active.